You may blame your mobile operator for slow mobile data speeds, dropped calls, and high prices, but the South African government and regulatory bodies are behind many of these problems.
A growing number of mobile users with higher data demands means mobile operators have to increase network capacity.
Increasing network capacity can be achieved in a few ways, including: more mobile sites, better technology, and more spectrum.
Local mobile operators are already using the latest technologies, which means that they have the option to build more sites or use more spectrum.
The cheaper option is to increase spectrum. However, thanks to numerous regulatory delays – with no end in sight – this valuable resource is still unused.
This means that operators are rapidly increasing the number of mobile sites – a costly exercise which translates into higher service prices.
The fact that South Africa is one of the countries which missed the International Telecommunications Union’s deadline to migrate to digital broadcasting is also a problem.
The migration to digital TV will free up valuable LTE spectrum, which will be used to provide end-users with better and cheaper mobile broadband services. The delay means this benefit will only be realised much later.
Vodacom punished for trying to make a plan
The continued delay in the handing out of spectrum forced mobile operators to look at alternatives, like partnering and acquiring companies with spectrum.
MTN and Telkom are working on network management services and reciprocal roaming agreements, while Vodacom is planning to acquire Neotel – which has spectrum.
However, in the case of Vodacom, the Competition Commission is now trying to stop Vodacom from using this spectrum for two years. The Competition Commission’s recommendations for the deal includes:
Vodacom shall not directly or indirectly use Neotel’s spectrum for the purpose of offering wholesale or retail mobile services to any of its customers for a period of two years from the Approval Date or 31 December 2017, whichever is earlier.
While Vodacom’s competitors may welcome this condition, it is short-sighted and is keeping South Africa back.
Spectrum is not a resource like gold or oil which continues to hold its value when left untouched. Unless it is used, its value is lost.
By not allowing operators to use spectrum means that South Africa is losing out. There is also no way of clawing back this loss.
The view that it is an acceptable solution to keep a company back – and drop everyone to the lowest common denominator – is costing South Africa dearly.
The Competition Commission is essentially punishing Vodacom for spending billions to offer better services to its customers – all in the name of “fair competition”.
There are many other options available to rather boost MTN, Cell C, and Telkom’s ability to compete with Vodacom.
But it is, of course, easier for the government to drag a good company down to a lower level than it is to build others up to a higher level.
The biggest losers in limiting a company’s ability to compete are South Africans and the South African economy. This seems to escape those in power.